Social Security Benefits Go Fully Electronic Next Year

The payment of Social Security benefits began in the form of physical checks mailed to beneficiaries of course, given that no other means of making payment was available at the time. With the advent of electronic payment options, the Social Security Administration (SSA) gave beneficiaries a choice of how they wished to receive their benefits: through standard mail via check or through electronic funds transfers to their own bank account or to a dedicated debit card. Next year though, the option of receiving benefits in check form will be eliminated as the SSA moves to a fully electronic payment system.

Why is this Happening?

According to the SSA, more than 85% of current beneficiaries have elected to receive their Social Security payment electronically anyway. This includes beneficiaries who receive Retirement, Disability and Supplemental Security Income benefits.

By eliminating manual checks, the SSA will be saving money in administrative expenses and since the entire system is under scrutiny right now and there are many concerns over how the program will be funded in the future, any cost cutting measures which can be implemented without disrupting the services provided are being taken.

The change will reduce expenses for printing, handling and mailing benefit checks each month. It will also reduce labor costs for dealing with lost, stolen or otherwise missing benefit checks as well.

When is the Change Happening?

Anyone who begins receiving disability benefits this year must set up their enrollment information with the electronic payment option. In other words, no one who is newly eligible for benefits may elect to receive payment via hardcopy check.

Anyone currently receiving benefits through regular mail will be required to switch over to the electronic payment system before March 1, 2013, which is the official date on which the entire system will be electronic. Current beneficiaries can set up direct deposit at any time prior to the change.

Anyone who has not provided their direct deposit information by the March 1st deadline will receive their payments through the SSA’s Direct Express debit card program so their benefits are not interrupted. The Direct Express card is a dedicated debit card onto which benefits can be deposited, similar to the cards which are currently used to distribute unemployment benefits, child support payments and food stamp funds at the state level.

Payment Options Moving Forward

The SSA will offer three electronic payment options under the new system. You can set up direct deposit to your bank or credit union account. You may also choose to receive payments by direct deposit to the Direct Express debit card. Or, if you prefer, you can establish an Electronic Transfer Account (ETA) with the SSA, though the account will cost $3.00 per month and only allows you to make four withdraws each month before you begin to incur additional fees.

How Do I Set Up Direct Deposit?

If you currently receive Social Security Disability benefits checks, you still have some time before the change happens to get your direct deposit account information set up with the SSA. There are a number of ways to provide the necessary information, including:

• Setting up direct deposit with a representative from your own bank or credit union.
• Having the SSA mail you the forms which you then complete and either mail back or drop off at your local SSA office.
• Getting the Direct Deposit Sign Up Form from your local SSA office.
• Printing the form from the SSA’s website and then mailing it in or dropping it off at the local office.
• Signing up online with the SSA’s website, though doing so means you must first create an account for the website.